Nigerian President Bola Ahmed Tinubu. Michael Kapler – Image Alliance/Getty Images
When a country's currency collapses, it usually means that the market has concluded that the place is not well run. In response, governors can take certain steps to try to restore people's confidence in their government and economy. This may include a combination of budget cuts, policy changes, and accountability measures. Or they could try something desperate, like finding a scapegoat and taking them hostage.
Unfortunately for the people of Nigeria, their leaders went for Plan B. This came after the country's government responded to the free fall of the naira by blaming cryptocurrency exchanges, including Binance, for the collapse. To solve this mess, the company sent two executives Wall Street Journal He has been identified as Binance's Africa Regional Director, Nadeem Angarwala, and Tigran Gambaryan, a former special agent with the IRS who leads financial crimes compliance. When they arrived, Nigerian authorities confiscated the men's phones and passports, and detained them in a house under guard.
Why do they do that? the Financial Times He has the explanation: An advisor to the Nigerian president says Binance executives are “giving away 'too much information' and suggested Nigeria may seek a $10 billion fine as 'retaliation' because they 'really screwed up our economy.'” Sources say it's not the charges The final agreement must be viewed as the starting point in the negotiations.
In other words, they took hostages to give them leverage to blackmail companies. These are the rules of the game that have become depressingly familiar in world affairs of late, and they place Nigeria's rulers in the same company as Hamas or Vladimir Putin's mafia regime in Russia, which held innocent reporter Ivan Gershkovich for almost a year without justification.
As for Binance, look, it's no one's idea of a typical corporate citizen. However, under new CEO Richard Teng's regime, the company has shown every indication that it is trying to take compliance seriously, saying in a blog post that it has repeatedly met with Nigerian officials. As for the detained executives, I cannot speak for Angarwala, but I can attest that Gambarian is highly regarded in law enforcement and cybersecurity circles, and has assisted in numerous criminal and terrorism investigations. Both men have young children who ask their mothers every night when Daddy is coming home.
There are also claims by Nigerian leaders that Binance, and cryptocurrencies in general, are hijacking the central bank's role in setting the value of the naira. It is true that many Nigerians are turning to cryptocurrencies, and the growth of stablecoins is beginning to challenge regional currencies in a number of places. But such activity is a symptom, not a cause – not unlike what happens in the alleys of Buenos Aries, where Argentines have for decades bought US dollars on the black market. In all of these situations, local residents lost confidence in the government's ability to protect the value of the national currency.
The final irony in all of this is that even if this ruse succeeds and Nigeria's rulers seize control of Binance for billions of dollars, it will do nothing to help the country's currency crisis. If Nigeria's leaders want to get to the root of the problem, they should stop blaming cryptocurrencies and instead look at Nigeria's reputation as a hotbed of fraud and kleptocracy, which is why the country ranks 145 on Transparency International's Global Corruption Index. Taking hostages will only make matters worse.
Jeff John Roberts
jeff.roberts@fortune.com
@jeffjohnroberts
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